Red Robin Gourmet Burgers, Inc. RRGB posted mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Both top and bottom lines declined year over year.
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Over the past two years, Red Robin has undergone a transformation, making significant progress in 2024. Notably, traffic trends improved by 600 basis points from the first to the fourth quarter. The company also made strides in cost-saving efforts, leading to a 19.0% rise in adjusted EBITDA during the fourth quarter. Although the overall financial performance for 2024 did not meet initial projections, substantial enhancements to the guest experience have strengthened the brand’s potential for expansion.
Heading into 2025, the company aims to drive guest traffic by fostering in-restaurant connections over its signature menu offerings while enhancing operational efficiency to improve restaurant and corporate-level profitability. Positive early trends in comparable sales in the fourth quarter have transferred into the first two months of 2025, affirming confidence in both the strategy of the company as well as its ability to generate long-term value with its guests and shareholders.
Following the announcements, the company’s shares surged 12.2% during yesterday’s after-hours trading session.
Delving Deeper Into RRGB’s Q4 Performance
In the fiscal fourth quarter, RRGB recorded an adjusted loss per share of 94 cents, wider than the Zacks Consensus Estimate of a loss of 54 cents. The company reported an adjusted loss per share of 66 cents in the prior-year quarter.
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Red Robin Gourmet Burgers, Inc. Price, Consensus and EPS Surprise
Red Robin Gourmet Burgers, Inc. price-consensus-eps-surprise-chart | Red Robin Gourmet Burgers, Inc. Quote
Quarterly revenues of $285.2 million beat the consensus mark of $281 million. However, the top line declined 7.7% year over year. In the quarter under review, comparable restaurant revenues (including the impact of a change in deferred loyalty revenue) increased 1.8% year over year.
RRGB’s Operating Results
The restaurant-level operating profit margin was 11.5% in the fiscal third quarter compared with 12.2% in the prior-year quarter. Our projection for the metric was 15.4%.
In the fiscal fourth quarter, restaurant labor costs came in at $109.1 million compared with $114.7 million reported in the prior year quarter. The figure compares with our projection of $104.5 million.
Other operating costs were $48.2 million compared with $50.8 million reported in the prior-year quarter. Our prediction for the metric was $47.2 million.
Adjusted earnings before interest expenses, income taxes, depreciation and amortization (EBITDA) in the fiscal fourth quarter amounted to $12.7 million compared with $10.6 million in the prior-year quarter. Our estimate for the metric was $11.3 million.
Other Financial Information of RRGB
As of Dec. 29, 2024, RRGB had cash and cash equivalents of $30.7 million compared with $23.6 million as of Dec. 31, 2023. Long-term debt, as of Dec. 29, 2024, was $181.6 million compared with $182.6 million in the prior-year quarter. Inventories in the quarter were $26.7 million compared with $26.8 million in the previous-year quarter.
Fiscal 2024 Highlights
Total revenues in fiscal 2024 amounted to $1.25 billion compared with $1.3 billion in fiscal 2023.
Adjusted EBITDA in fiscal 2024 came in at $38.8 million compared with $68.9 million reported in fiscal 2023.
In fiscal 2024, adjusted loss per share came in at $3.34 compared with $1.44 reported in the previous year.
RRGB’s Fiscal 2025 Guidance
The company projects fiscal 2025 total revenues between $1.225 billion and $1.250 billion. Restaurant-level operating profit is expected to range from 12% to 13%. In 2025, adjusted EBITDA (excluding stock-based compensation) is anticipated to be between $60 million and $65 million. Capital expenditures are estimated to be between $25 million and $30 million.
RRGB’s Zacks Rank
Red Robin currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Retail-Wholesale Releases
Restaurant Brands International, Inc. QSR reported fourth-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
During the quarter, consolidated comps increased 2.5% year over year and net restaurants grew 3.4%. Global system-wide sales rose 5.6% year over year. QSR unveiled its long-term consolidated performance expectations from 2024 to 2028. It anticipates achieving more than 3% growth in comparable sales and at least a 5% net restaurant increase.
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At company-operated restaurants, sales were $2.31 billion, down 7% year over year. Sales at franchise-operated restaurants amounted to $3.95 billion, which increased 2% year over year. The global comps increased 0.4% compared with 3.4% in the prior-year quarter. MCD’s comps increased after witnessing a decline in the preceding two quarters.
YUM! Brands, Inc. YUM reported fourth-quarter 2024 results, with adjusted earnings and total revenues beating the Zacks Consensus Estimate. Both top and bottom lines increased on a year-over-year basis.
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